Dunlop Pneumatic Tyres Co Ltd v Selfridge & Co Ltd [1915]

English Contract Law

Dunlop Pneumatic Tyres Co Ltd v Selfridge & Co Ltd [1915]
‘Tyre’ by Kiku Poch

After litigation is bought against a third party the enforcement of a contract extending beyond reasonable bounds proves the undoing of a commercial tyre distributor when the rules of English contract law move to narrow the scope of claim and protect those party to sub-contracts.

In 1911 the appellant tyre manufacturer set about establishing written agency distributorship agreements with a number of commercial outlets in order to retain control over the sale value of its key products, wherein sch.2 and sch.5 of those contracts required all participating agencies to agree that:

“(2) We will not sell or offer any Dunlop motor tyres, covers or tubes to any private customers or to any co-operative society at prices below those mentioned in the said price list…nor give to any such customer or society any…discounts or advantages reducing the same.

(5) We agree to pay to the Dunlop Pneumatic Tyre Co Ltd, the sum of 5l for each and any tyre, cover or tube sold or offered in breach of this agreement, as and by way of liquidated images and not as penalty, but without prejudice to any other rights or remedies you or the Dunlop Pneumatic Tyre Co Ltd may have hereunder.”

In exchange the agencies were granted a 10% discount and some instances annual rebates for high value orders, and so on this occasion the respondents had purchased a Dunlop tyre from an agency, who as consideration were prevented from selling Dunlop products to any other firms or individuals for less than the standard list price, while afforded a discretionary right to sell Dunlop products to other trade outlets at a maximum of 10% discount on the proviso that those purchasing had pre-signed a prohibitive contract similar to the one held by the agencies.

With this in mind the respondents later sold a particular Dunlop tyre to a private customer at a seven and a half percent discount, and yet when ordering the tyre from the agency they were informed that no discount could be offered to the buyer without the completion of a signed price maintenance agreement (an act later executed by the respondents). 

Having learned of this the appellants sought an injunction and sued the respondents for breach of contract on grounds that the agency were acting under their principle control, therefore by selling the tyre to a prohibited party they were liable for damages as expressed in sch. 5 above. 

In the first instance the judge awarded in favour of the appellants before granting the injunction as requested, while challenged in the Court of Appeal the respondents argued that the contract between the agency and the appellants excluded the right to enforce it upon a third party on grounds that no consideration had been given by the appellants when the price maintenance agreement was drafted between the respondents and the agency. 

Having lost the appeal the appellants pressed the issue before the House of Lords, who unanimously upheld the previous judgment on grounds that lack of consideration at the point the agreement was made precluded the appellants any claim of right under English common law, while reminding the parties that:

“[O]nly a person who is a party to a contract can sue on it.

Thoburn v Sunderland City Council [2002]

English Constitutional Law

Thoburn v Sunderland City Council [2002]
‘The Greengrocer’s Shop’ by Terrick Williams

In a collective hearing the facts surrounding a national transition between imperial and metric measurements for the purposes of trade, gave rise to claims of unlawful application and subsequent challenge within the High Court as below:

Thoburn v Sunderland City Council

In this matter a greengrocer was accused of trading without licensed weighing scales under s.11(2) of the Weights and Measures Act 1985, while it was also alleged that despite repeated warnings to calibrate his scales in line with the legal requirements, the defendant had continued to operate the machines until their seizure by the local authority, and so losing his case in the Divisional Court the defendant later applied for referral to the High Court in order to further discuss the legalities of both imperial and metric measurements.

Hunt v Hackney London Borough Council 

On this occasion another fruit and vegetable trader was accused of a number of offences under s.4 of the Prices Act 1974 and s.28(1) of the Weights and Measures Act 1985 after commercial standards officers made discreet purchases revealing average product weight losses of twenty percent in favour of the defendant. 

Charged in the first instance, the defendant challenged the validity of the legislation and also sought the opinion of the High Court on grounds that he contended the applicability of the 1974 Act and the unlawfulness of displaying goods under the imperial weights system.

Harman and another v Cornwall County Council

This matter involved a market trader and fishmonger, who were both accused of selling their produce using imperial units of cost and thereby violating art.5 of the Price Marking Order 1999, as found under the Prices Act 1974 and sch.1 of the Weights and Measures Act 1985 as amended by The Weights and Measures Act 1985 (Metrication) (Amendment) Order 1994 (SI 1994/1851). 

Here it was alleged that the two defendants had also prevented their attending local authority representative from removing the imperial price stickers when attempting to obtain evidence of their acts, and so having admitted liability the judge was referred to the outcome of Thoburn and raised the question as to the intention that both imperial and metric systems were to continue to run in parallel to one another, and whether the trading standards officers were acting beyond their powers when attempting to obtain pricing stickers from traders despite no suggestion of dishonesty by those accused.

Collins v Sutton London Borough Council

In a slightly different circumstance the appellant had argued that the terms of the renewal of his trading licence had been unlawfully amended by the issuing council, and so applied for a summons under s.30(1)(a) of the London Local Authorities Act 1990 while claiming that under the Weights and Measures Act 1985 (Metrication) (Amendment) Order 1994, Units of Measurement Regulations 1994 and  The Weights and Measures (Metrication Amendments) Regulations 2001 (SI 2001/85) the local authority had instructed the appellant that he must display and charge for his produce under the metric weights system and that such a request constituted a breach of statutory powers and a violation of art.10 of the Human Rights Act 1998 (Freedom of expression). 

To clarify, s.1(1) of the Weights and Measures Act 1963 provided that both the metric and imperial system of measurements were permitted equal presence within the United Kingdom until the creation of the European Communities Act 1972  and the introduction of Directive 80/181/EEC in 1979, after which chapter 1 of Directive 89/617/EEC cited that the metre and the kilogram were to become the single legal measurements of both length and mass, however chapter IV provided that certain goods sold loose in bulk were  allowed to be measured in pounds and ounces until 31 December 1999. 

In the following two years The Units of Measurements Regulations 2001 (SI 2001/55) provided that imperial measures (while unlawful as primary indicators for sale) were still permitted as secondary indicators until 1 January 2010, while contrastingly the Price Marking Order 1999 required traders to indicate unit prices in metric measures, yet anything to the contrary was a criminal offence under para.5 of sch.2 of the Prices Act 1974.

When brought before the High Court the four appellants relied upon a contention that the Weights and Measures Act 1985 (Metrication) (Amendment) Order 1994, Units of Measurement Regulations 1994, Weights and Measures (Metrication Amendments) Regulations 1994 and the Price Marking Order 1999 were all unlawful and thus void under the principle of ‘implied repeal’, which is a process applied when Parliament enacts successive statutes containing inconsistent terms, and where the former is repealed by the latter in order to avoid future binding and confusion of effect, while it was also argued that the 1985 Act had repealed s.2(2) of the European Communities Act 1972 in order to prevent future subordinate legislation, as had been used to replace the imperial system with the metric measurement system. 

Having considered the appellants’ somewhat unorthodox line of argument the Court dismissed the appeals on grounds that while observation of European Community law remained first and foremost to the function of the sovereign, there was nothing in the European Communities Act 1972 that allowed any outside jurisdiction to compromise the supremacy of Parliament, and that the executive measures of the 1972 Act were not subject to repeal by implication but through express and specific decisions, before reminding the parties that:

“Parliament cannot bind its successors, and that is a requirement of legislative sovereignty.”

Council of Civil Service Unions v Minister for the Civil Service [1985]

English Constitutional Law

Council of Civil Service Unions v Minister for the Civil Service [1985]
‘Yarra Bank (Trade Union) Meeting’ by Patrick Harford

Executive powers and national security form the footing of this call for judicial review under the argument that changes to civil servant working conditions were executed without due consideration for those affected.

In a relationship with a chequered history it was decided by the Minister of the Civil Service (aka Prime Minister Mrs Thatcher) that since the previous strike actions of key staff within the Government Communications Headquarters (GCHQ) had proven destructive, it was necessary to execute instructions to ban any affiliation by government employees with trade unions of any sort, and while this unprecedented move was carried out under legitimate sovereign powers, it directly conflicted with the principle that governmental decisions were first offered to consultation with the trade unions as an inherent duty to exercise fairness when carrying out executive function.

On this occasion the instructions were carried out under art.4 of the Civil Service Order 1982 but orally released within the House of Commons, and so greeted with natural anger and confusion, while the aim of this sudden prohibition was simply to circumvent open discussion in lieu of avoiding future strike actions now considered a significant threat to national security.

When heard at court level the presiding judge had held that the instructions were issued on grounds demonstrating no effort toward consultation and were therefore invalid in their application, while under challenge the Court of Appeal had held that the executive action itself was not exempt from judicial review because the order came from prerogative powers rather than statute, and that despite the latter source forming the premise for most reviews, the Court saw no distinction between a self-executed order and that of an act of Parliament.

In response the defence used by the Minister for the Civil Service relied upon operational safety measures, and how under those circumstances it was felt that the same people responsible for the previous compromises were right to be excluded from using consultation as leverage to create further damage, while it was further argued that any discussions between trade unions and Government would have amounted to the same outcome regardless of protests by those affected. 

This position was further supported by the fact that s.(a) and (a)(ii) of art.4 of the Order in Council 1982 allowed the Minister to create regulations controlling the conduct of those employed, therefore denial of trade union membership lawfully fell within those remits.

When the Court upheld the Minister’s actions, the appellants pressed the issue, whereupon the House of Lords sought to establish whether (i) judicial review was necessary, and (ii) whether the respondents had acted in manner that precluded fairness and a duty to follow precedent, after which it was held that while the avoidance of discussion demonstrated a clear breach of that duty, it was not the responsibility of the courts to determine what constituted a threat to national security and that the executive itself was empowered to prove or disprove itself as to its own actions, all of which led the House to conclude that:

“[W]here a question as to the interest of national security arises in judicial proceedings the court has to act on evidence.”

Attorney-General v Jonathan Cape Ltd [1976]

English Constitutional Law

Attorney-General v Jonathan Cape Ltd  [1976]
‘An Interesting Book’ by Claude Raguet Hirst

Public interest, national security and the freedom of speech are key ingredients to a ‘united kingdom’, therefore should any one of those elements become endangered any true sense of democracy would be diminished in favour of state control, and so when a Cabinet Minister chose to keep an open diary of his time in government, he did so on the pretence that it would one day become a published series for public reading. 

Upon retirement the now deceased author had endowed his executors the rights to attain full publication with the support of the Treasury solicitors, whereupon they did so in the hope of releasing sections of the first volume through a leading national newspaper, and while there was an initial collaboration between the executors and the Secretary of the Cabinet, numerous demands to remove what was considered critical text dissolved the partnership into legal argument and subsequent litigation. 

In the first instance the Attorney-General issued a writ preventing publication on grounds of conventional breach of confidence and national safety, while in a second writ the newspapers were subjected to the same restrictive terms in order to cease printing and publishing the planned articles.

In the lower courts the claimants argued that history demonstrated how current and former Ministers served the country in the knowledge that any official discourse was considered secret, and that where permitted for public release such information was typically held to a thirty-year restraining period, while the respondents countered that any information contained within the compiled material was now over a decade old and so posed no real threat to either national stability or the ongoing operational integrity of the Cabinet.

When submitted before the Court of the Queen’s Bench, the court held that the burden of proof rested upon the claimants, and so held that it must be proven beyond any reasonable doubt that: 

1. A breach of confidence had occurred.

2. Public interest required the repression of information.

3. Any need for public disclosure was insufficient to stand against non-publication. 

And so given time to consider the arguments presented it was agreed that despite strong supposition on the part of the Attorney-General, there had been sufficient examination of the final and edited source material to prevent any interference by the court, and that with an appreciation of free speech and the transparency of the author’s intentions, the respondents were free to both publish the first volume and release the preceding articles as and when time permitted, while clarifying to the court that:

“[T]here may be no objection to a Minister disclosing (or leaking, as it was called) the fact that a Cabinet meeting has taken place, or, indeed, the decision taken, so long as the individual views of Ministers are not identified.” 

Van Gend en Loos v Nederlandse Administratie de Belastingen [1963]

European Law

Van Gend en Loos v Nederlandse Administratie de Belastingen [1963]
‘Dutch Windmills’ by Eugene Louis Boudin

When a Dutch importer of ureaformaldehyde fell victim to domestically manipulated customs tariffs, the question of both ‘direct effect’ and the individual right to challenge an abuse of EU Treaties became subject to a preliminary ruling under art.177 EC. 

Because of the supranational nature of the case it was first believed inapplicable when challenges to increased (or recategorised) tax rates were put into effect by national statutes, however the argument made was that at the time of the abuse the original Treaty taxation of the affected product was set at just three percent, and so when domestic reclassification set to increase the rate to eight percent the claimant challenged the adjustment by citing art.12 of the Treaty of Rome, which explains that:

“Member States shall refrain from intro­ducing between themselves any new customs duties or imports or exports or any charges having equivalent effect and from increasing those which they already apply in their trade with each other.”

While noting how in addition to the terms of art.12, art.95 EC states that:

“A Member State shall not impose, directly or indirectly, on the products of other Member States any internal charges of any kind in excess of those applied directly or indirectly to like domestic products.”

During the preliminary ruling hearing the European Court of Justice noted that if the protective principles of Community law were to remain excluded from violations of Member States it would defeat their very purpose, thus it was held that the inherent meaning and purpose of art.12 was to afford unequivocal rights to individuals, who when taking issue with such matters, would do so in the knowledge that they were protected by the national courts.

In closing it was held by the Court that all Member States would thereon refrain from increasing levies and customs duties conflicting with those put forward in the original Treaty of Rome, and that because the recategorisation of that specific tariff was now found to be illegal, the matter was referred back to the national courts in order to establish how best to reclassify the products, while the Court reminded the parties that:

“[A]ccording to the spirit, the general scheme and wording of the Treaty, Article 12 must be interpreted as providing direct effects and creating individual rights which national courts must protect.”

R v Ministry of Agriculture, Fisheries and Food ex p Hedley Lomas [1991]

European Law

R v Ministry of Agriculture, Fisheries and Food ex p Hedley Lomas
‘The Sheep Farmer’ by Barry Ross Smith

The application of a Treaty article while a harmonising Directive precludes the right to endorse sanctions for Member State non-compliance, results in a loss of licence for Ireland, when exporting sheep for slaughter. This led to a preliminary ruling to ascertain if such a Directive could reasonably deny, or even restrict, exportation to Member States failing to uphold the aims of the assigned article.

For clarity, art.43 EC and art.100 EC were designed to reduce the suffering of animals sent for slaughter through the use of stunning and killing within specific guidelines under Directive 74/577/EEC, while art.36 EC includes restrictive measures surrounding the importation and exportation of products (including livestock) when acting in the interests of public safety, security and protection of human, animal and plant life.

When Spain transposed Directive 74/577/EEC it mirrored the terms of art.1 of the Directive with the exception of sanctions for non-compliance,  and so the UK Ministry of Agriculture, Fisheries and Food prohibited sheep exportation to Spain through the denial of specific export licences, which left an Irish sheep farmer unable to export his livestock to a fully compliant Spanish slaughterhouse.

Having sought judicial review and damages in the High Court, the court requested a preliminary ruling under art.177 EC, and so asked the European Court of Justice: 

1. Did the terms of Directive 74/577/EEC prevent restrictive measures under art.36 EC? 

2. Did the effects of art.36 EC have universal effect, or were they subject to specific criteria?

3. Where ineffective, was the Member State applying the article liable for compensation where an export licence was denied?

Whereupon the Court held that:

1. Although the terms of Directive 74/577/EEC did not expressly outline the penalties for non-compliance, it did confer those measures to the Member States in order for legislative powers to ensure the observation of those terms, however the actions taken by the UK were entirely subjective as opposed to evidence-based, therefore to rely upon the effects of art.36 EC was to act without authority when denying the free movement of goods by another Member State.

2. The terms of art.36 EC did not allow one Member State to exercise restrictive powers over another, while the route taken must be one of either action, or complaint to the Commission under art.170 EC or art.186 EC, while continuing to allow the movement of goods unless or until proven correct.

3. When acting in breach of art.43 EC it is the obligation of the acting Member State to provide reparation for damage caused by the breach, as was established in Francovich and others v Italy and Van Gend en Loos v Nederlandse Administratie de Belastingen, and that when deciding the measure of compensation it must rely upon its own domestic legislation observe the principles of non-discrimination and effective remedy when discussing the matter in the courts and calculating the amount payable, while further reminding the parties that:

“A Member State cannot take unilateral action against defaults by other Member States. The Treaty of Rome created an original legal order in which the procedures necessary for establishing and penalizing a breach of its provisions are strictly regulated.”

Marleasing SA v La Comercial Internacional de Alimentación SA [1990]

European Law

Marleasing SA v La Comercial Internacional de Alimentación SA [1990]
‘Sunset Over Sagrada Familia’ by Ana Maria Edulescu

The composition and function of incorporated companies and the fraudulent and deceptive manner in which their assets are contained, becomes central to a contention between founders and creditors when nullity is sought before the national court.

When creditor and claimant (Marleasing SA) discovered that one of the three founders of La Comercial Internacional de Alimentación SA had used the firm to avoid third party recovery of assets, it took action against them in order to expose the company as an illegally created organisation as defined under arts.1261 and 1275 of the Spanish Civil Code.

In response the defendant founder sought the protection of art.11 of Directive 68/151/EEC (also known as the ‘First Directive’), which included an exhaustive list of qualifying conditions for company nullity, yet none of which included the grounds relied upon by the claimant, and so when debated by the Juzgado de Primera Instancia e Instrucción it was agreed that as transposition of the Directive had not been undertaken, the issue remained unsolved without reference to the European Court of Justice under art.177 EC, and so on this occasion the court asked:

1. Were the relevant terms contained in art.11(2) of Directive 68/151/EEC enforceable between individuals despite a failure to adopt them into national Spanish law?

After observing the disparities between existing domestic statute and the meaning of the Directive, the Court explained that no terms of a Directive could be used between individuals under Community law, however a failure to transpose a Directive could result in individual action against the Member State where clarity and specificity of the Directive was shown, on grounds that it remained the Member State’s obligation to align the principles of the Directive against existing statute in order that the Directive’s effect superceded domestic laws.

Going further still, the Court also held that in relation to the protection of nullity under art.11(2)(b) of Directive 68/151/EEC nullity may be provided for where the objects of the company are unlawful or contrary to public policy, or where the number of founding members is less than two, and so in conclusion the Court finally outlined how art.12 nullity entailed dissolution and thereby failed to affect the validity of the company or its dealings despite the presence of unlawful operation or intent, therefore it was down to the discretion of the national courts to determine how best to meet the needs of both the claimant and the defendant, while observing the meaning and effect of Directive 68/151/EEC, before clarifying to the parties that:

“[O]bligation on the part of the national courts to interpret their national law in conformity with a Directive, which has been reaffirmed on several occasions, does not mean that a provision in a Directive has direct effect in any way as between individuals.”